There are three main reasons why the price of art rises:
● an increase in the perceived worth of the art in the marketplace
● a change in the status of the artist
I'm going to unpick these below (in reverse prder) and suggest some reasons why raising prices in the absence of any of the above might be the artistic equivalent of shooting yourself in the foot!
Many of who grew up with rampant inflation still have it factored into our brains as a really sound reason as to why prices rise. However, if you exclude house prices, general consumer prices have not moved much in recent years. In fact, we've been living through a time of extremely low inflation. (It almost went negative at one point!)
This is what has happened over the last 9 years in the UK
I came across a very handy calculator online - the Historical UK inflation rates and calculator (which uses Office for National Statistics figures) - which calculates what a value in a specific year would be worth in today's values.
It allows you to extrapolate a sale price in a past year to one at today's date - based purely on inflation
TIP: If you're having problems selling your paintings, why not try checking back to when you were achieving sales and checking prices you charged then to the ones you are charging now?
An artist who wins a major prize or becomes elevated to membership of an art society or secures gallery representation - or gets mentioned on the television or in the press - sometimes starts to reflect their change in status in the prices they charge for their paintings.
The reality is that although a positive status change can add credibility to the story you tell about your paintings they rarely add a significant amount to the price you can charge; unless you KNOW you can sustain that price over time - when your change in status is yesterday's news.
In general terms, a steady increase slowly over time, backed up a credible CV which indicates growing acceptance and recognition within the marketplace (eg increased exhibitions; moving from group exhibitions to solo exhibitions / rinse and repeat!) provides a much more sustainable basis for increasing prices over time.
Put another way, what are you going to do if you increase your prices because you get taken on by a gallery - and then get dropped by that gallery a year later because your paintings are not selling? It's not just music companies who take a hard look at the talent in relation to numbers!
TIP: Aim to set an upward trend in terms of exhibitions, sales and prices - but don't over-reach on price such that it has a negative effect on exhibitions and sales.
Do NOT try and be a one hit wonder! Use the change in status to raise your profile and anything and everything in your marketing that helps to promote more sales. After all sales are what generate income, not price increases!
There are all sorts of things that create value in the marketplace.
Some examples of ways in which artwork is perceived to have value include:
Take two contemporary artists, Damien Hirst and Rachel Whiteread, who both came to prominence in the 1990's as so-called Y.B.A.'s: Young British Artists. Both have won the Tate museum's Turner Prize: Ms. Whiteread in 1993 and Mr. Hirst in 1995. And both have made their way into high-profile collections. Next week Christie's is offering an important early sculpture by Ms. Whiteread, a fiberglass and rubber cast of two mattresses from 1991, which has been on extended loan to the Irish Museum of Modern Art in Dublin. Christie's suggests a value of $400,000 to $600,000. Meanwhile, Mr. Hirst's most famous early sculpture, a tiger shark suspended in a glass tank of formaldehyde, from 1992, sold in January for $13.3million.
According to conventional wisdom, the value of an artist's work increases when she has shows in prestigious museums. But as Mark Fletcher, a private art adviser who has dealt in work by both artists, said, "Whiteread has an extraordinary, esteemed museum exhibition and patronage history, but it's Hirst, which has little such institutional support, which does extremely well in the marketplace."
The X Factor: Is the Art Market Rational or Biased? | Greg Allen | New York Times May 1, 2005
Buyers in other investment markets would not approach any major purchase without a team of highly vetted and professional advisors. In the art market, however, it has been common for buyers to rely on reputation, personal judgement and opinion. Even in areas where forensics, science, legal and other due diligence are available, collectors have often deferred to promises and the opinions of advisors. Plotting the art market: An interview with Clare McAndrew
resale prices matter to collectors, as auction sellers are not inclined to sell if they are likely to make a loss. This supports the theory that there is much more to collecting art than following the simple conventional rhetoric of “just buying what you like and selling what you don’t”. Deloitte Art and Finance Report 2016
TIP: Artists should aim to monitor and manage the influence on the perception of the value of their artwork. An artist can:
The value of paintings is determined by whether or not they sell. In other words, the price is the sale price, not the asking price.
For all the experts and connoisseurs and scholars and analysts, when it comes right down to it, the price of a work of art is based on what buyer and seller agree it's worth, and that's all.